The Capgemini SE Board of Directors, chaired by Paul Hermelin today in Paris, investigated and approved the Capgemini Group’s accounts 1F2 for the fiscal year ending December 31, 2021.
Capgemini recorded results in 2021 and exceeded the goal again set in October last year. Against the backdrop of a strong global economic recovery, the acceleration of digital transformation of large corporations and organizations was highlighted last year. Therefore, the Group benefits from investing in a portfolio of innovative offers and positioning it as a strategic partner with its clients. This achievement is also based on the successful integration of Altran, strengthening Capgemini’s global leadership in the field of intelligent industry and providing commercial and operational synergies planned prior to originally envisioned plans. Made it possible to produce.
The group generated € 18,160 million in revenue in 2021, an increase of + 14.6% in published data compared to fiscal year 2020. This represents + 15.1% growth at the exchange rate, slightly above the upwardly revised range from + 14.5% to + 15%. .. The net impact of the acquisition on growth is 4.9 points, which basically corresponds to the integration of Altran after April 1, 2020. Therefore, the group’s organic growth (that is, corrected for range of impact and exchange rates) is + 10.2%.
The strong growth momentum observed earlier this year has been maintained for the past three months in all group regions, both in terms of growth at a constant exchange rate (+ 12.5%) rather than on an organic basis (+ 13.2%). I am.
Digital and cloud-related services, which account for about 65% 2F3 of Capgemini’s business, are accelerating to an important digital transformation project with a constant rate of change and an annual growth rate of well above 10%. Group of customers. As expected, the Group also benefited from the commercial synergies created by the acquisition of Altran, especially in the area of the intelligent industry.
Orders received were € 19,462 million, an increase of + 15.8% at a constant exchange rate compared to 2020. Therefore, the book-to-billing ratio for fiscal year 2021 was 1.07. In the fourth quarter of 2021, orders increased by +10.3. % Reaching € 5,726 million at a constant exchange rate. This corresponds to the book-to-invoice ratio of 1.17.
The operating margin increased by + 25% to € 2.34 billion, equivalent to 12.9% of sales and well above the minimum target rate of 12.7% announced in October last year. In addition to an increase of 1.0 points compared to 2020, this rate is 0.6 points higher than the level of operating profit generated before the pandemic (12.3% in fiscal year 2019). This significant increase in operating margin is based on improved gross profit, complementing the cost synergies that follow the integration of Altlan and the reduction of certain operating costs in the pandemic context. increase.
Other operating income and expenses increased by € 124 million compared to 2020, representing a net expense of € 501 million. This change is primarily explained by the € 120 million capital gains realized during the sale of Odigo in 2020.
As a result, Capgemini’s operating profit increased by + 22% to € 1,839 million, or 10.1% of sales.
The financial results represent a cost of € 159 million, compared to € 147 million in 2020. This slight increase is primarily due to the full-year impact of debt costs associated with the acquisition of Altran.
The tax amount is 526 million euros, of which 36 million euros are related to the transitional impact of the 2017 US tax reform compared to the previous year’s 400 million euro tax amount and 8 million euros revenue. Excluding exceptional items, the effective tax rate was 29.2% compared to 33% in 2020.
Net income and group share increased by + 21% to € 1.157 billion and earnings per share (undiluted) increased by + 20% to € 6.87 million. Excluding the fundamental effects associated with capital gains from the sale of Odigo, these two treasury aggregates increased by + 38%. Normalized earnings per share reached € 8.97. The normalized result before the provisional tax amount was recognized was € 9.19, an increase of + 27% over the year.
The amount of organic free cash flow generated was € 1,873 million, an increase of € 754 million compared to 2020. This amount is well above the twice-yearly raised threshold of € 1.7 billion, which is targeted for 2021. This performance is especially reflected. Strong growth in Group sales and improved operating margins over the past fiscal year, coupled with a significant reduction in the need for Group sales.
In 2021, Capgemini invested a net amount of € 369 million in external growth businesses. In addition, the Group paid a dividend of € 329 million (equivalent to € 1.95 per share) and allocated € 200 million to buy back shares under the multi-year program. Finally, the 8th Employee Shareholding Plan, which took place in the second half of the year, resulted in a total capital increase of € 589 million.
The Board of Directors has decided to propose a dividend of € 2.40 per share at the shareholders’ meeting on May 19, 2022. Therefore, the group share, which is the distribution ratio of net income, will be 35% according to the distribution policy of the group.
Despite the stricter criteria for comparison, the trends observed in the last month of this year are in perfect agreement with the previous quarter. However, at constant exchange rates, sustained levels of activity in France are partially hidden by the effects of the sale of Odigo.
The development of these regions is driven by trends in sectors that are still relatively uniform on a global scale. All sectors recorded similar growth rates to the previous two quarters. Therefore, the industry (25% of group sales), consumer goods (13% of group), and services (5% of group) sectors continue to record growth at a constant exchange rate of around 20%. This is followed by the public sector (14% of the group) and the TMT sector (13% of the telecommunications, media, technology and group), growing at a constant exchange rate of around 10%. Financial services (22% of the group) remained strong, while the energy and utilities sector (8% of the group) recorded a slight decline.
Changes in the workforce
As of December 31, 2021, the Group’s total workforce was 324,700. This 20% increase in the workforce compared to the end of 2020 in the tensions of the qualified resource market demonstrates Capgemini’s ability to attract talent and drive growth.
In particular, the offshore workforce accounts for 189,000 employees, or 58% of the total workforce, an increase of 4 points compared to the end of 2020. Therefore, the group is beyond the level reached before the integration of Altran.
Evaluation of the integration and synergies of Altran
Capgemini has successfully completed the operational integration of Altran, which began when the company effectively took control in April 2020, and is particularly pleased with its talent retention, joint offer development, and commercial momentum. The result was good.
To prove a strong strategic and operational rationale for the success of this acquisition and its integration, the Group will provide the expected commercial and cost synergies prior to the three-year post-acquisition deadline. I have already created it. Therefore, the synergies between costs and operating models will reach an annual rate of over € 80 million by the end of 2021, compared to the three-year target of € 70 to € 100 million. Similarly, commercial synergies have exceeded € 350 million from 2021 against a long-term target of € 200-350 million.
Capgemini’s balance sheet structure hasn’t changed much over the past year.
Due to the significant surplus in total cash positions, in 2021 the Group proceeded with the early redemption of two bond issuances. One was due in November 2021 and was repaid in August, and the other was due in April 2022 and was repaid in December. ..
As of December 31, 2021, the Group has a total of € 3.5 billion in cash and cash management assets on its balance sheet. Considering € 6.7 billion in financial debt and derivative products, the Group’s net debt as of December 31, 2021 has dropped significantly from € 4.9 billion in the previous year to € 3.2 billion.
Social and environmental responsibility
In the still pandemic health situation, Capgemini continued its efforts in 2021 in terms of social and environmental responsibility.
Following our commitment in early 2021, the Group announced its ESG (Environment, Society, Governance) policy in December last year. Based on a number of projects already underway, Capgemini will participate in the United Nations Sustainable Development Goals related to each pillar of ESG and its activities within the framework of this policy. We have set priorities and 11 ambitious goals.
Capgemini also continued to develop its “Net Zero” strategy in 2021 and implemented an action plan for the entire group. In 2021, Capgemini reduced its total CO2 emissions by 33% compared to the previous year. This reduction is primarily due to the reduction in travel-related emissions, given the limits imposed by health conditions. In an initiative to reduce carbon emissions, Capgemini has also significantly reduced emissions associated with offices and data centers. This decline is based on new actions specifically aimed at improving energy efficiency and increasing the use of renewable energy. Therefore, renewable energy accounted for 57% of the group’s electricity consumption in 2021, compared to 46% in 2020.
The group has also stepped up its initiative to develop human capital. In 2021, approximately 13 million hours of training were provided to Group employees. That is, an average of 45.7 hours per employee. This represents an annual increase of over 5%, in line with the Group’s commitment.
Finally, Capgemini continued to make progress in terms of diversity and inclusiveness. In particular, the proportion of women in the total workforce reached 35.8% at the end of 2021, compared to 33.7% at the end of 2020 and 22.4% at the end of 2020. .. A uniform increase of 2 points or more among the group’s executive leaders, ie, these two measurements, compared to 20.3% at the end of 2020.
In fiscal year 2022, the Group has set the following financial goals:
Revenue growth at constant exchange rates from + 8% to + 10%.
Operating profit from 12.9% to 13.1%.
Generate organic free cash flow of over € 1.7 billion.
The scope change should represent a growth of 1 point at the bottom of the target range and 2 points at the top of the range.